Disclaimer: Each post is for informational purposes only. It is not a solicitation, a recommendation or advice to buy or sell any security or investment product. Information provided in each post does not constitute investment advice.

Saturday, November 19, 2011

Intermediate term update
Stocks have met the minimum requirement for a counter trend rebound since the October low (Chart 1). The bust of a much discussed triangle may offer confirmation of another meaningful down-swing:
1] wave (3)-down of [3]-down or [A]-down of cycle wave c-down (Chart 1) or
2] wave (C)-down of [X]-down of a mid-term correction to the Hope Rally (Chart 2 blue).
3] wave (C)-down of [2]-down of a cyclical bull market (wave five) (Chart 3, blue).

It's probable that the decline since the October high may be a partial retrace of the October advance, given the October breadth thrust and still shallow retrace of key international stock market benchmarks (see Hope and Resistance (11/11/11) ). Chart 2 (green) and Chart 3 (purple, green) illustrate the potential for another advance to recovery highs once the correction to the October advance is over.

Near term outlook
As it was the case during the Jul-Oct sell-off, transports continue to offer more trackable wave structures since the October low (Chart 4).

With this past week's decline, stocks have now met the minimum requirement for a net partial retrace of the October advance (Chart 4, non-extended purple and green), in terms of wave structure despite the lack of a lower low in many indexes.

Potential for a (much) deeper pullback exits (Chart 4, extended purple, blue, red). In this case, the rebound off this past week's low is a small-degree wave B or wave ii rebound, which may or may not be complete (Chart 5).

This past week's low is likely a key pivot on the bearish side. The high on Nov 15th is likely a key pivot on the bullish side.

Intermediate term update
Stocks have met the minimum requirement for a counter trend rebound since the October low (Chart 1). The bust of a much discussed triangle may offer confirmation of another meaningful down-swing:
1] wave (3)-down of [3]-down or [A]-down of cycle wave c-down (Chart 1) or
2] wave (C)-down of [X]-down of a mid-term correction to the Hope Rally (Chart 2 blue).
3] wave (C)-down of [2]-down of a cyclical bull market (wave five) (Chart 3, blue).

It's probable that the decline since the October high may be a partial retrace of the October advance, given the October breadth thrust and still shallow retrace of key international stock market benchmarks (see Hope and Resistance (11/11/11) ). Chart 2 (green) and Chart 3 (purple, green) illustrate the potential for another advance to recovery highs once the correction to the October advance is over.

Near term outlook
As it was the case during the Jul-Oct sell-off, transports continue to offer more trackable wave structures since the October low (Chart 4).

With this past week's decline, stocks have now met the minimum requirement for a net partial retrace of the October advance (Chart 4, non-extended purple and green), in terms of wave structure despite the lack of a lower low in many indexes.

Potential for a (much) deeper pullback exits (Chart 4, extended purple, blue, red). In this case, the rebound off this past week's low is a small-degree wave B or wave ii rebound, which may or may not be complete (Chart 5).

This past week's low is likely a key pivot on the bearish side. The high on Nov 15th is likely a key pivot on the bullish side.